AIM-listed Union Jack Oil, a UK focused onshore hydrocarbon production, development and exploration company, has announced its audited results for the year ended 31 December 2021.

Operational Highlights

• Successful proppant squeeze and coiled tubing exercise at Wressle resulted in an instantaneous flow rate of over 1,000 barrels of high-quality oil per day ('bopd') being achieved with zero water cut
• Wressle-1 pressure test analysis by ERCE indicates potential flow rates of between 1,200 to 1,500 bopd are achievable
• Wressle Revised Field Development Plan submitted to the North Sea Transition Authority ('NSTA') for approval
• Results from West Newton EWT confirm substantial hydrocarbon discoveries within the Kirkham Abbey formation
• Independent RPS Group ('RPS') review predicts initial average production rates of up to 35.6 million cubic feet of gas and 1,000 bopd from a horizontally drilled well at West Newton
• Planning granted at West Newton for both A and B site works and three year permit extension
• Completion of purchase of a further 15% interest in PEDL253 containing the Biscathorpe Prospect, bringing Union Jack’s interest to 45%
• Carbon Intensity Study on Biscathorpe Project rated AA by Gaffney Cline
• Purchase of a 2.5% royalty interest in the North Sea Claymore, Piper and Scapa oilfields
• Appeal against planning refusal at Biscathorpe submitted to Planning Inspectorate

Financial Highlights

• Oil revenues increased by over 1,000% during 2021
• Maiden gross profit on oil sales achieved
• Cash balances and near-term receivables of £7,545,575 as at 9 May 2022
• The Company is currently funded for all operational and contracted or planned CAPEX costs, including any budgeted drilling activities for at least the next 12 months
• Debt free
• Early settlement payment made to Calmar LP in respect of deferred consideration on acquisition of 25% interests in PEDL180 and PEDL182, containing the Wressle development
• Company solicitors progressing legal work on Capital Reduction to enable the Company to execute a share-buy-back programme or dividend payment. Appropriate resolutions relating to this are included in the Notice of Annual General Meeting for shareholders to consider within the Annual Report
• The Company’s AGM will be held at 11.00 a.m. on 23 June 2022, at the offices of Osborne Clarke, 2 Temple Back East, Temple Quay, Bristol, BS1 6EG

David Bramhill, Executive Chairman, commented:
"My confidence in Union Jack’s future remains highly positive.

"During 2021 and to date, the Company has advanced a number of its key projects, especially at Wressle which, as stated earlier, have been transformational financially with substantial revenues and indications that the Wressle journey has only just commenced.

"The latest results at West Newton are highly encouraging regarding the prospects of the significant hydrocarbon discoveries made to date and their development potential, following an extensive testing and investigative programme conducted on both sides of the Atlantic by industry leading geological and geochemical consultancies.

"I remain confident that future news arising from our well-balanced portfolio containing relevant components of production, development, appraisal and exploration will continue to vindicate the Board’s unflinching optimism in respect of our Company’s focused strategy.

"In closing, I believe our Company is in sound financial health with a robust balance sheet. Union Jack continues to be debt free, with significant cash reserves and substantial future revenues expected.

"The Company is currently funded for all G&A, OPEX, and contracted or planned CAPEX costs, including any budgeted drilling activities, for at least the next 12 months.

"The future of Union Jack remains bright."

Corporate and financial

The significant revenues received from Wressle have already transformed the financial wellbeing of the Company and significantly strengthened its balance sheet.

During March 2021, the Company consolidated its ordinary shares on a 200 for one basis and the new issued share capital was 99,079,532, each with a nominal value, postconsolidation of 5 pence.

During September 2021, £3,000,000 was raised before expenses, further bolstering our cash reserves, ensuring that Union Jack continued to retain its “going concern” status in its accounts.

The Company remains debt free and had cash balances and short-term receivables at 9 May 2022, of £7,545,575. The Company is currently funded for all operational and all contracted or planned CAPEX costs, including any budgeted drilling activities for at least the next 12 months.

Revenues from oil sales of £1,894,875 reported in 2021, compared to £158,004 during 2020, have had a dramatic effect on our Income Statement, resulting in the Company reporting a gross profit for the first time.

Net revenues of £2,877,081 registered to date during 2022 already comfortably exceed the revenues for 2021.

Subsequent to the year end, in March 2022 early settlement of £2,083,333 was made to Calmar LP in respect of the prudent deferred consideration on acquisition of 25% interests in PEDL180 and PEDL182 containing the Wressle development.

During 2021, the Company agreed to a share swap in the shares of its holding in Elephant Oil, a UK registered unquoted company in exchange for shares in a new entity, Elephant Oil Corp., registered in Nevada, in the United States of America. Elephant Oil Corp. has applied for its shares to be traded on NASDAQ in the near-future.

Post year end, and given the current stage of the Company’s development and its improved cash position, a decision was made by the Board to undertake a Capital Reduction exercise to allow the payment of a cash dividend to shareholders or enable a share-buy-back programme. Appropriate resolutions are included in the Notice of Annual General Meeting for shareholders to consider.

KeyFacts Energy: Union Jack Oil UK country profile